Government could lose key vote in lower house over small business access to justice reforms

Reforms which improve access to justice for small businesses are set to become a political football in the lower house as Labor and the Coalition tussle over control in the dying days of Australia’s 45th parliament.

The government faces the prospect of losing a second vote in the lower house when Parliament returns next week, with Labor planning to challenge its authority by bringing the small business reforms to a vote.

The opposition passed the amendments — which allow small businesses to apply to avoid paying legal costs in public interest competition cases against large firms — through the Senate last night after Mathias Cormann, leader of government business in the Senate, was forced to concede he lacked the numbers to stop them.

Complicating matters for the government, there is sympathy for the changes among Nationals politicians, with Senator John Williams supporting the changes.

Shadow Assistant Treasurer Andrew Leigh tells SmartCompany Labor thinks it “probably” has the numbers to pass the amendments and will lobby the crossbench for support over the weekend.

He’s calling on the government to turnaround and support the reforms.

“I’d be delighted to see bipartisanship … the Nationals would like to come across and support this.”

“Let the leash loose on the Nationals and allow the whole coalition to vote.”

Assistant Treasurer Stuart Robert did not respond to requests for comment on the government’s voting intentions on Friday morning.

SmartCompany also contacted the Treasurer’s office to clarify the government’s plans but was directed back to the Assistant Treasurer.

The amendments to the Competition and Consumer Act create an avenue for small businesses to apply for a no adverse cost order if pursuing large firms through the courts for anti-competitive behaviour.

Designed to support high-profile competition law cases between small suppliers and large firms, if a court agrees the case is in the public interest, small businesses won’t have to pay the other side’s legal fees if they lose.

Both ASBFEO and the Council of Small Businesses of Australia (COSBOA) back the changes, which are considered to be relatively uncontroversial.

However, the government’s precarious position in the lower house elevates the amendments to a question about its control of Parliament, throwing small-business policy into the middle of a political melee.

If the government cements its opposition to the legislation, it would need to actively lobby the crossbench against the reforms.

Meanwhile, access to justice for small businesses remains an issue of concern for the small business sector more broadly.

A survey of 1,600 small businesses conducted by ASBFEO last year found one in five (22%) have experienced a dispute in the last five years.

Of those businesses, the vast majority (87%), said they had experienced a financial loss as a result, while a further 16% said there was a material opportunity cost to the time and effort they put into making a case.

In a statement released today, Australian small and family enterprise ombudsman Kate Carnell said the reforms would help to level the power imbalance for small businesses pursuing legal action.

“Access to justice is regularly raised as an issue with us by small businesses, particularly how expensive and time-consuming the court system can be. Small businesses don’t have that kind of money and time,” she said.

COSBOA boss Peter Strong says the best thing the government can do is support the bill.

“Parliament is a mess, there’s nothing anyone can do about that,” he tells SmartCompany.

“None of this has got anything to do with anything else … all of this is politics.”

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